Nepal Army defends its decision over helicopter procurement process

Nepal Army’s (NA) decisions to purchase three helicopters—one medium and two light helicopters—without or limited competition was questioned by the Office of Auditor General (OAG) to which army has defended and said that the decision was taken with compulsion. NA has already expedited the procurement process ahead and is now waiting for the delivery of the helicopters.

Army signed a purchase agreement with Italian company Agusta to purchase a medium-size helicopter as stated in the OAGs 55th Annual Report and it was the only company to submit cost estimates when the NA asked for cost details from the helicopter manufacturing companies. The decision was taken as the Italian company only submitted the cost details out of companies from six countries were regarded as the potential supplier.

NA prepared the cost estimate of 14 million euros and planned to purchase the helicopter from the same company for 13.98 million euros as there was only one proposal. OAG was concerned over competition issue. OAG stated that Cabinet meeting on June 30, 2016 had approved NA’s purchase plan by ensuring competition but NA made decision and awarded the contract as only one company submitted the proposal and it didn’t ensured the competition.

NA currently has old Super Puma helicopter and plans to replace it for VVIPs’ travels as occasionally they use an MI-17 helicopter for it. Army had to purchase the helicopter from the Italian company as other companies failed to meet the required technical specifications said Brig General Gokul Bhandari, NA spokesperson.

OAG report also shows that Army decided to purchase 4 extra instruments worth 386,200 euros from the Italian company although they were not part of the procurement plan which OAG stated as inappropriate. The auditing body also questioned the purchase of 2 light helicopters. The tender were invited for purchasing the helicopters together but Army decided to purchase only one Écureuil from France based-Airbus Helicopters in the first phase without any valid reason.

According to the report, NA pursued a separate proposal later to purchase another helicopter and subsequently decided to acquire a helicopter from Bell Helicopters. Airbus Helicopters and the US-based Bell Helicopters had submitted proposals.

Army had projected the cost at 3.19 million euros to purchase a light helicopter and NA approved the proposal of the France-based company at the price of 2.56 million euros.

OAG noted that Army decided to purchase it from Bell at $3.8 million after the company was only to respond to a separate NA tender for another light helicopter. The OAG stated that though deal with the American company was signed after the Cabinet approved the NA proposal, it was against the specifications set earlier.

Brig General Bhandari said they decided to purchase different helicopters after realizing the Army’s needs diversified services.

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